Faber
(Dec 9, RM1.48)
Maintain market perform with fair value RM1.53: Faber announced yesterday that it had received a statement of claim from Baynona Group. Its UAE subsidiary, Faber LLC, and Project Penyelenggaraan Lebuhraya Berhad (Propel) are defendants in a net claim of about RM29.8 million.
The claims made by Baynona Group are in relation to completed contract works in the UAE first awarded to Faber LLC by the Department of Municipal Affairs, Western Region Municipality. Upon being awarded the contract, Faber LLC contracted out works to Propel which in turn, subcontracted out works to Baynona Group.
As for Faber, we understand that there is no direct award of subcontracting works (for the improvement, development, upgrade and maintenance of infrastructure facilities at Madinat Zayed) to Baynona Group.
Propel informed Faber that the outstanding amount owed to Baynona Group is significantly lower at about RM3.2 million.
The lawsuit against Faber is currently at a preliminary stage as Baynona Group is seeking the Abu Dhabi Court’s approval for the appointment of a committee of experts to examine the documents and project work in relation to the amount claimed. Therefore, Baynona Group has yet to make any specific claim against Faber. Faber is unable to assess the financial impact, if any, arising from the statement of claim.
Risks to our view include:
(i) Failure to secure an extension to the concession agreement with the government; and
(ii) Delays in property launches and approvals, which could affect revenue from the property segment.
We make no changes to our forecasts pending the outcome of the court decision. Our sum-of-parts fair value estimate of RM1.53 remains as we await further announcements on the lawsuit. We reiterate our “market perform” call on the stock. — RHB Research, Dec 9
(Dec 9, RM1.48)
Maintain market perform with fair value RM1.53: Faber announced yesterday that it had received a statement of claim from Baynona Group. Its UAE subsidiary, Faber LLC, and Project Penyelenggaraan Lebuhraya Berhad (Propel) are defendants in a net claim of about RM29.8 million.
The claims made by Baynona Group are in relation to completed contract works in the UAE first awarded to Faber LLC by the Department of Municipal Affairs, Western Region Municipality. Upon being awarded the contract, Faber LLC contracted out works to Propel which in turn, subcontracted out works to Baynona Group.
As for Faber, we understand that there is no direct award of subcontracting works (for the improvement, development, upgrade and maintenance of infrastructure facilities at Madinat Zayed) to Baynona Group.
Propel informed Faber that the outstanding amount owed to Baynona Group is significantly lower at about RM3.2 million.
The lawsuit against Faber is currently at a preliminary stage as Baynona Group is seeking the Abu Dhabi Court’s approval for the appointment of a committee of experts to examine the documents and project work in relation to the amount claimed. Therefore, Baynona Group has yet to make any specific claim against Faber. Faber is unable to assess the financial impact, if any, arising from the statement of claim.
Risks to our view include:
(i) Failure to secure an extension to the concession agreement with the government; and
(ii) Delays in property launches and approvals, which could affect revenue from the property segment.
We make no changes to our forecasts pending the outcome of the court decision. Our sum-of-parts fair value estimate of RM1.53 remains as we await further announcements on the lawsuit. We reiterate our “market perform” call on the stock. — RHB Research, Dec 9
